Registration Rights Agreement Dated March 18, 2009 by and between KongZhong Corporation and Nokia Growth Partners II, L.P.
EXHIBIT
4.3
Dated
March 18, 2009
by and
between
KongZhong
Corporation
and
Nokia
Growth Partners II, L.P.
TABLE
OF CONTENTS
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Page
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Recitals
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1
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Section
1.
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Certain
Definitions.
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1
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Section
2.
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F-3
Registration.
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3
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Section
3.
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Registration
Procedures
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4
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Section
4.
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Piggyback
Registrations.
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6
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Section
5.
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Registration
Expenses.
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7
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Section
6.
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Indemnification.
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7
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Section
7.
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Securities
Act Restrictions
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9
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Section
8.
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Transfers
of Rights.
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9
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Section
9.
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Miscellaneous.
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10
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i
Registration Rights
Agreement, dated March 18, 2009, by and between KongZhong Corporation, an
exempted limited liability company incorporated under the laws of the Cayman
Islands (the “Company”), and Nokia
Growth Partners II, L.P., a Delaware limited partnership (the “Investor”).
Recitals:
WHEREAS:
A. The
Company and the Investor are parties to a Note and Warrant Purchase Agreement,
dated as of March 18, 2009, pursuant to which the Company desires to issue
and sell to the Investor (i) US$6,775,400 aggregate principal
amount of the Company’s Convertible Senior Note Due 2014 (the “Note”) and (ii) a
warrant to purchase 80,000,000 ordinary shares of the Company, par value
US$0.0000005 per share (the “Ordinary Shares”)
(such warrant, the “Warrant”), and the
Investor desires to purchase from the Company the Note and the Warrant;
and
B. In
connection with the consummation of the transactions contemplated by the
Purchase Agreement, the parties hereto desire to enter into this Agreement in
order to create certain registration rights for the Investor as set forth
below;
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein and other
good and valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
Section
1. Certain
Definitions.
In addition to the terms defined
elsewhere in this Agreement, the following terms shall have the following
meanings:
“Agreement” means this
Registration Rights Agreement, including all amendments, modifications and
supplements and any exhibits or schedules to any of the foregoing, and shall
refer to this Registration Rights Agreement as the same may be in effect at the
time such reference becomes operative.
“Business Combination”
means a merger, consolidation, statutory share exchange, sale, transfer or
exclusive license of all or substantially all of assets or shares or similar
transaction that requires the approval of the Company’s shareholders or other
transactions or series of transactions that otherwise result in a change in
control of the Company.
“Commission” means the
United States Securities and Exchange Commission or any successor
agency.
“Company” has the
meaning set forth in the Preamble.
“Effectiveness Period”
means the period from and including the date as of which the Shelf Registration
Statement becomes effective until the Note Shares, the Warrant Shares and any
securities issued by the Company after the date hereof in respect of the Note
Shares or the Warrant Shares by way of a share dividend or share split or in
connection with a combination, subdivision or reclassification of the Ordinary
Shares or a Business Combination have ceased to be Registrable
Shares.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Governmental Entity”
means any United States of America, People’s Republic of China and other
national, state, provincial, local and other governmental or regulatory
authority.
“HKIAC” has the
meaning set forth in Section 9(e)(ii).
“Investor” has the
meaning set forth in the Preamble. References herein to the Investor
shall apply to the Permitted Transferee or any other transferee as consented to
by the Company pursuant to Section 8.
“Issue Date” means the
date of original issuance of the Note and the Warrant.
“Note” has the meaning
set forth in Recital A hereto.
“Note Shares” means
the Ordinary Shares acquired by the Investor upon conversion of the
Note.
“Ordinary Shares” has
the meaning set forth in Recital A hereto.
“Person” means any
individual, corporation, trust, association, company, partnership, joint
venture, limited liability company, joint stock company, Governmental Entity or
other entity.
“Permitted Transferee”
means Nokia Corporation.
“Piggyback
Registration” has the meaning set forth in
Section 4(a).
“Prospectus” means the
prospectus or prospectuses (whether preliminary or final) included in any
Registration Statement and relating to Registrable Shares, as amended or
supplemented and including all materials incorporated by reference in such
prospectus or prospectuses.
“Purchase Agreement”
means the Note and Warrant Purchase Agreement specified in Recital A hereto, as
such agreement may be amended from time to time.
“Registrable Shares”
means, at any time, (i) the Note Shares, (ii) the Warrant Shares and
(iii) any securities issued by the Company after the date hereof in respect
of the Note Shares or the Warrant Shares by way of a share dividend or share
split or in connection with a combination, subdivision or reclassification of
the Ordinary Shares or a Business Combination, but excluding (iv) any and
all Note Shares and Warrant Shares and other securities referred to in clauses
(i), (ii) and (iii) that at any time after the date hereof (a) have been
sold pursuant to an effective Registration Statement or Rule 144 under the
Securities Act, (b) have been sold in any other transaction such that a
subsequent public distribution of such securities would not require registration
under the Securities Act, (c) are eligible for sale pursuant to Rule 144
under the Securities Act without limitation thereunder on volume or manner of
sale, (d) are not outstanding or (e) have been transferred in
violation of Section 8 hereof or any provision of the Purchase
Agreement. It is acknowledged that, once a security of the kind
described in any of clauses (i), (ii) and (iii) above becomes a security of
the kind described in clause (iv) above, such security shall cease to be a
Registrable Share for all purposes of this Agreement and the Company’s
obligations regarding Registrable Shares hereunder shall cease to apply with
respect to such security.
“Registration
Expenses” has the meaning set forth in Section 5(a).
“Registration
Statement” means any registration statement of the Company which covers
any of the Registrable Shares pursuant to this Agreement, including the
Prospectus, and any pre-effective or post-effective amendments and supplements
to such Registration Statement, all exhibits and all documents incorporated by
reference in such Registration Statement.
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“Securities Act” means
the Securities Act of 1933, as amended.
“Shelf Registration
Statement” has the meaning set forth in Section 2(a).
“Shelf Takedown” has
the meaning set forth in Section 2(b).
“Suspension Period”
has the meaning set forth in Section 3(f).
“Warrant” has the
meaning set forth in Recital A hereto.
“Warrant Shares” means
the Ordinary Shares acquired by the Investor upon exercise of the
Warrant.
In addition to the above definitions,
unless the context requires otherwise:
(i) all
references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of any statute, include any rules and regulations promulgated
under such statute) and to any section of any statute, rule or regulation
include any successor to the section;
(ii) whenever
the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed followed by the words “without limitation”;
(iii) when a
reference is made in this Agreement to “Recitals” or “Sections”, such reference
shall be to a Recital or Section of this Agreement unless otherwise
indicated;
(iv) references
to “herein”, “hereof”, “hereunder” and the like refer to this Agreement as a
whole and not to any particular section or provision, unless the context
requires otherwise;
(v) references
to “Business Day” shall mean any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the City of
New York, New York, United States of America, or Beijing, People’s Republic of
China generally are authorized or required by law or other governmental actions
to close;
(vi) all
references to “US$” mean the lawful currency of the United States of America;
and
(vii) the table
of contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement.
Section
2. F-3
Registration.
(a) Initial Registration.
Subject to the other provisions of this Agreement and the eligibility of the
Company to use Form F-3, the Company shall use reasonable best efforts to
prepare and file or cause to be prepared and filed with the Commission, as soon
as practicable but in any event by the date that is 60 calendar days after the
Issue Date, a Registration Statement on Form F-3 for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act
registering the resale from time to time of the Registrable Shares by the
Investor (the “Shelf
Registration Statement”).
-3-
(b) Right to Effect Shelf
Takedowns. The Investor shall be entitled, at any time and
from time to time when a Shelf Registration Statement is effective and until the
expiration of the Effectiveness Period, to sell such Registrable Shares as are
then registered pursuant to such Shelf Registration Statement (each, a “Shelf Takedown”).
The Investor shall provide written notice to the
Company of any plan to sell any
Registrable Shares not less than 10
Business Days prior to the intended date of the first sale under such plan. Such notice shall set forth the
plan of sale for a period of 60 calendar days (or such other period upon which
the Investor and the Company may mutually agree). The Investor shall
provide the Company with a new notice in accordance with the preceding two
sentences prior to any sale of Registrable Shares after the
expiration of the initial 60-day period (or such period upon which the Investor
and the Company may mutually agree). It is acknowledged that,
notwithstanding any other provisions herein, such Shelf Takedowns are not
expected to be underwritten.
Section
3. Registration
Procedures. (a) In connection with the registration
obligations of the Company under Section 2 hereof, the Company
shall:
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(i)
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subject
to the other provisions of this Agreement, use its reasonable best efforts
to cause the Shelf Registration Statement to be declared effective under
the Securities Act as promptly as is practicable but in any event by the
date that is 120 calendar days after the Issue Date and to keep the Shelf
Registration Statement continuously effective under the Securities Act
until the expiration of the Effectiveness Period. At the time
the Shelf Registration Statement is declared effective, the Investor shall
be named as a selling security holder in the Shelf Registration Statement
and the related Prospectus in such a manner as to permit the Investor to
deliver such Prospectus to purchasers of Registrable Shares in accordance
with applicable law;
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(ii)
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use
reasonable best efforts to prepare and file with the Commission such
amendments and supplements to such Shelf Registration Statement and the
Prospectus used in connection therewith as may be necessary to comply with
the applicable requirements of the Securities Act and to keep such Shelf
Registration Statement effective until the expiration of the Effectiveness
Period, and to comply with the applicable requirements of the Securities
Act with respect to the disposition of all the Registrable Shares covered
by such Shelf Registration Statement until the expiration of the
Effectiveness Period in accordance with the intended methods of
disposition set forth in such Shelf Registration
Statement;
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(iii)
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use
reasonable best efforts to obtain promptly the withdrawal or lifting of
any order suspending the effectiveness of the Shelf Registration
Statement;
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(iv)
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notify
the Investor, as soon as reasonably practicable, at any time when a
Prospectus would be required under the Securities Act to be delivered by a
distributor, of the occurrence of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, and, at the request of the Investor, use
reasonable best efforts to prepare, as soon as reasonably practicable, a
supplement or amendment to such Prospectus so that, as thereafter
delivered to any prospective purchasers of such Registrable Shares, such
Prospectus shall not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading;
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(v)
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notify
the Investor, as soon as reasonably practicable, at any time of (A) any
request by the Commission or any other Governmental Entity for amendments
or supplements to a Registration Statement or Prospectus and (B) the
issuance by the Commission or any other Governmental Entity of any stop
order suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Shares or the initiation of any proceedings
for that purpose; and
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(vi)
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cooperate
with the Investor with respect to the Registrable Shares being offered
and, to the extent applicable, use reasonable best efforts to facilitate
the timely preparation and delivery of certificates (not bearing any
restrictive legend, except as required by applicable law) representing the
Registrable Shares to be offered and resold pursuant to a Registration
Statement and enable such certificates to be in such denominations or
amounts, as the case may be, as the Investor may reasonably
request.
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(b) The
Company may require the Investor to furnish to the Company information regarding
such Investor and each distributor of the Registrable Shares as to which any
registration is being effected and the distribution of such Registrable Shares
as the Company may from time to time reasonably request in connection with such
registration.
(c) The
Investor agrees that, upon being advised in writing by the Company of the
occurrence of an event pursuant to Sections 3(a)(iv) and 3(a)(v), the
Investor will immediately discontinue (and direct any other Persons making
offers and sales of the Registrable Shares to immediately discontinue) offers
and sales of such Registrable Shares pursuant to any Registration Statement
until the Investor is advised in writing by the Company that the use of the
Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 3(a)(iv), and, if so directed by the
Company, the Investor will deliver to the Company all copies of the Prospectus
covering such Registrable Shares current at the time of receipt of such
notice. The Company will use reasonable best efforts to ensure that
the use of the Prospectus may be resumed as promptly as
practicable.
(d) It is
acknowledged that any failure of the Company to file a Registration Statement or
any amendment or supplement thereto or to cause any such document to become or
remain effective until the expiration of the Effectiveness Period, due to
reasons that are not reasonably within its control, or due to any refusal of the
Commission to permit a Registration Statement or Prospectus to become or remain
effective or to be used because of unresolved comments thereon from the
Commission (or on any documents incorporated therein by reference) despite the
Company’s good faith and reasonable best efforts to resolve those comments,
shall not be a breach of this Agreement.
(e) The
Investor shall provide, at least five Business Days prior to the anticipated
filing date of the Registration Statement, all requested information required to
be provided by the Investor for inclusion therein. If the Investor
fails to provide such information at least five Business Days prior to the
anticipated filing date, the Company shall have the right to defer the filing of
the Registration Statement by such an amount of time as it takes to obtain and
reflect in the Registration Statement all information that is necessary or
advisable to be reflected in the Registration Statement and as would be
necessary or advisable under the then-existing market conditions. The
Investor shall, as soon as reasonably practicable, notify the Company in the
event that any information supplied by the Investor for inclusion in any
Registration Statement or related Prospectus contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and immediately discontinue (and direct any other Persons making
offers and sales of the Registrable Shares to immediately discontinue) offers
and sales of such Registrable Shares pursuant to such Registration Statement
until the Investor is advised in writing by the Company that the use of the
Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 3(a)(iv), and, if so directed by the
Company, the Investor shall deliver to the Company all copies of the Prospectus
covering such Registrable Shares current at the time of such
notice.
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(f) The
Company may (i) delay the filing or effectiveness of a Registration
Statement or (ii) prior to the pricing of any offering of Registrable
Shares pursuant to a Registration Statement, delay such offering (and, if it so
chooses, withdraw any Registration Statement that has been filed) if the Company
determines in its sole discretion (x) that proceeding with such an offering
would require the Company to disclose material information that would not
otherwise be required to be disclosed at that time and that the disclosure of
such information at that time would not be in the best interests of the Company
or its shareholders or (y) that the registration or offering to be delayed
would, if not delayed, materially and adversely affect the Company and its
subsidiaries, taken as a whole, or materially interfere with, or jeopardize the
success of, any pending or proposed material transaction, including any debt or
equity financing, any acquisition or disposition, any recapitalization or
reorganization or any other material transaction, whether due to commercial
reasons, a desire to avoid premature disclosure of information or any other
reason. Any period during which the Company has delayed a filing, an effective
date or an offering pursuant to this Section 3(f) is herein called a “Suspension
Period”. The Company shall provide prompt written notice to
the Investor of the commencement and termination of any Suspension Period (and
any withdrawal of a Registration Statement pursuant to this Section 3(f)),
but shall not be obligated under this Agreement to disclose the reasons
therefor. The Investor shall keep the existence of each Suspension
Period confidential and refrain from making offers and sales of Registrable
Shares (and direct any other Persons making such offers and sales to refrain
from doing so) during each Suspension Period.
Section
4. Piggyback
Registrations.
(a) Right to
Piggyback. If the
Company proposes to register any Ordinary Shares under the Securities Act (other
than on a registration statement on Form X-0, X-0, X-0 or F-4) at any time
prior to the expiration of the Effectiveness Period, whether for its own account
or for the account of one or more holders of Ordinary Shares (other than the
Investor), and the form of registration statement to be used may be used for any
registration of Registrable Shares (a “Piggyback
Registration”), the Company shall give written notice to the Investor of
its intention to effect such a registration and, subject to Sections 4(b)
and 4(c), shall include in such registration statement and in any offering of
Ordinary Shares to be made pursuant to that registration statement such amount
of Registrable Shares that the Company and the Investor have mutually agreed
upon, with respect to which the Company has received a written request for
inclusion therein from the Investor no more than five Business Days after
the Company’s dispatch of its notice to the Investor or, in the case of a
primary offering, such shorter time as is reasonably specified by the Company in
light of the circumstances, provided that such
amount of Registrable Shares shall account for not less than 20% of the total
number of Ordinary Shares to be so registered. The Company shall have
no obligation to proceed with any Piggyback Registration and may abandon,
terminate and/or withdraw such registration for any reason at any time prior to
the pricing thereof.
(b) Priority on Primary
Piggyback Registrations. If a Piggyback Registration is
initiated as a primary underwritten offering on behalf of the Company and the
managing underwriters advise the Company that in their opinion the number of
Ordinary Shares proposed to be included in such offering exceeds the number of
Ordinary Shares which can be sold in such offering without materially delaying
or jeopardizing the success of the offering (including the price per share of
the Ordinary Shares proposed to be sold in such offering), the Company shall
include in such registration and offering (i) first, the number of Ordinary
Shares that the Company proposes to sell and (ii) second, to the extent the
number of Ordinary Shares which can be sold in such offering without materially
delaying or jeopardizing the success of the offering (including (i)) exceeds the
number of Ordinary Shares proposed under (i), the number of Ordinary Shares
requested to be included therein by holders of Ordinary Shares, including the
Investor (if the Investor has elected to include Registrable Shares in such
Piggyback Registration), pro rata among all such holders on the basis of the
number of Ordinary Shares requested to be included therein by all such holders
or as such holders and the Company may otherwise agree, such that the sum of the
Ordinary Shares proposed under (i) and the number of Ordinary Shares proposed
under (ii) does not exceed the number of Ordinary Shares which can be sold in
such offering without materially delaying or jeopardizing the success of the
offering (including (i)).
-6-
(c) Priority on Secondary
Piggyback Registrations. If a Piggyback Registration is
initiated as an underwritten registration on behalf of a holder of Ordinary
Shares other than the Investor, and the managing underwriters advise the Company
that in their opinion the number of Ordinary Shares proposed to be included in
such registration exceeds the number of Ordinary Shares which can be sold in
such offering without materially delaying or jeopardizing the success of the
offering (including the price per share of the Ordinary Shares to be sold in
such offering), the Company shall include in such registration the number of
Ordinary Shares requested to be included therein by the holders of Ordinary
Shares, including the Investor (if the Investor has elected to include
Registrable Shares in such Piggyback Registration), pro rata among such holders
on the basis of the number of Ordinary Shares requested to be included therein
by such holders or as such holders and the Company may otherwise agree, such
that the aggregate number of Ordinary Shares proposed to be included in the
offering does not exceed the number of Ordinary Shares which can be sold in such
offering without materially delaying or jeopardizing the success of the
offering.
(d) Selection of
Underwriters. If any Piggyback Registration is a primary or
secondary underwritten offering, the Company shall have the sole right and
discretion to select the managing underwriter or underwriters to administer any
such offering.
(e) Basis of
Participations. The Investor may not sell Registrable Shares
in any offering pursuant to a Piggyback Registration unless it (a) agrees to
sell such Registrable Shares on the same basis provided in the underwriting or
other distribution arrangements approved by the Company and that apply to the
Company and/or any other holders involved in such Piggyback Registration and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, lockups and other documents required under the terms of
such arrangements.
Section
5. Registration
Expenses. All expenses incident to the Company’s performance of or
compliance with this Agreement, including all registration and filing fees, fees
and expenses of compliance with securities laws and printing expenses and fees
and disbursements of counsel for the Company and all independent certified
public accountants and other Persons retained by the Company (such expenses, the
“Registration Expenses”) (but not including any fees attributable to the sale of
Registrable Shares), shall be borne by the Company. The Investor
shall bear the cost of all underwriting discounts and commissions associated
with any sale of Registrable Shares and shall pay all of its own costs and
expenses, including all fees and expenses of any counsel (and any other
advisers) representing the Investor, and any share transfer taxes and
duties.
Section
6. Indemnification.
(a) The
Company shall indemnify, to the fullest extent permitted by law, the Investor
and each Person who controls the Investor (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities, judgments, costs
(including reasonable costs of investigation) and expenses (including reasonable
attorneys’ fees) arising out of or based upon any untrue or allegedly untrue
statement of a material fact contained in any Registration Statement or
Prospectus or any amendment thereof or supplement thereto or arising out of or
based upon any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are made in reliance and in conformity with
information furnished to the Company by the Investor for use
therein.
-7-
(b) In
connection with any Registration Statement in which the Investor is
participating, the Investor shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
such Registration Statement or Prospectus, or amendment or supplement thereto,
and shall indemnify, to the fullest extent permitted by law, the Company, its
officers and directors and each Person who controls the Company (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities,
judgments, costs (including reasonable costs of investigation) and expenses
(including reasonable attorneys’ fees) arising out of or based upon any untrue
or allegedly untrue statement of material fact contained in the Registration
Statement or Prospectus, or any amendment or supplement thereto, or arising out
of or based upon any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only to the extent that the same are made in reliance and in conformity with
information furnished to the Company by or on behalf of the Investor for use
therein.
(c) Any
Person entitled to indemnification hereunder shall (i) give prompt written
notice to the indemnifying Person of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying Person to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
Person. Failure to so notify the indemnifying Person shall not
relieve it from any liability that it may have to an indemnified Person except
to the extent that the indemnifying Person is materially and adversely
prejudiced thereby. The indemnifying Person shall not be subject to
any liability for any settlement made by the indemnified Person without its
consent (but such consent shall not be unreasonably withheld). An
indemnifying Person who is entitled to, and elects to, assume the defense of a
claim shall not be obligated to pay the fees and expenses of more than one
counsel (in addition to one local counsel) for all Persons indemnified
(hereunder or otherwise) by such indemnifying Person with respect to such claim
(and all other claims arising out of the same circumstances), unless in the
reasonable judgment of any indemnified Person, there may be one or more legal or
equitable defenses available to such indemnified Person which are in addition to
or may conflict with those available to another indemnified Person with respect
to such claim, in which case such maximum number of counsel for all indemnified
Persons shall be two rather than one. If an indemnifying Person is
entitled to, and elects to, assume the defense of a claim, the indemnified
Person shall continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but, except as set forth above, the indemnifying
Person shall not be obligated to reimburse the indemnified Person for the costs
thereof. The indemnifying Person shall not consent to the entry of
any judgment or enter into or agree to any settlement relating to a claim or
action for which any indemnified Person would be entitled to indemnification
hereunder, unless such judgment or settlement imposes no ongoing obligations on
any such indemnified Person and includes as an unconditional term the giving, by
all relevant claimants and plaintiffs to such indemnified Person, a release,
satisfactory in form and substance to such indemnified Person, from all
liabilities in respect of such claim or action for which such indemnified Person
would be entitled to such indemnification. The indemnifying Person
shall not be liable hereunder for any amount paid or payable or incurred
pursuant to or in connection with any judgment entered or settlement effected
with the consent of an indemnified Person unless the indemnifying Person has
also consented to such judgment or settlement.
(d) The
indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
Person or any officer, director or controlling Person of such indemnified Person
and shall survive the transfer of securities and the expiration of the
Effectiveness Period but only with respect to offers and sales of Registrable
Shares made before the expiration of the Effectiveness Period.
(e) If the
indemnification provided for in or pursuant to this Section 6 is due in
accordance with the terms hereof, but is held by a court to be unavailable or
unenforceable in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each applicable indemnifying Person, in lieu of
indemnifying such indemnified Person, shall contribute to the amount paid or
payable by such indemnified Person as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying Person, on the one hand, and of the
indemnified Person, on the other hand, in connection with the statements or
omissions which result in such losses, claims, damages, liabilities or expenses
as well as any other relevant equitable considerations. The relative
fault of the indemnifying Person, on the one hand, and of the indemnified
Person, on the other hand, shall be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
supplied by the indemnifying Person or by the indemnified Person, and by such
Person’s relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. In no event shall the
liability of the indemnifying Person be greater in amount than the amount for
which such indemnifying Person would have been obligated to pay by way of
indemnification if the indemnification provided for under Section 6(a) or
6(b) hereof had been available under the circumstances.
-8-
Section
7. Securities Act
Restrictions. The Registrable Shares are restricted securities
under the Securities Act and may not be offered or sold except pursuant to an
effective Registration Statement or an available exemption from registration
under the Securities Act. Accordingly, the Investor shall not,
directly or through others, offer or sell any Registrable Shares except pursuant
to a Registration Statement as contemplated herein or pursuant to Rule 144 or
another exemption from registration under the Securities Act, if
available. Prior to any Transfer of the Purchased Securities, Note
Shares or Warrant Shares, the Investor shall notify the Company of such Transfer
(it being understood that the notification of any sale of Note Shares and/or
Warrant Shares pursuant to an effective registration statement shall be made in
accordance with Section 2(b) of this Agreement). With respect to any
such Transfer (other than pursuant to an effective registration statement), the
Company may require the Investor to provide, prior to such Transfer, such
evidence that the Transfer will comply with the Securities Act (including
written representations and an opinion of counsel) as the Company may reasonably
request. The Company may impose stop-transfer instructions with
respect to any Registrable Shares that are to be transferred in contravention of
this Agreement. Any certificates representing the Registrable Shares
may bear a legend (and the Company’s register of members may bear a notation)
referencing the restrictions on transfer contained in this Agreement and the
Purchase Agreement, until such time as such securities have ceased to be (or are
to be transferred in a manner that results in their ceasing to be) Registrable
Shares.
Section
8. Assignment; Transfers of
Rights. Neither this Agreement nor any rights hereunder are
assignable or transferable, without the prior written consent of the Company;
provided, however, if the
Investor transfers the Purchased Securities to the Permitted Transferee in
accordance with Section 4.5(b) of the Purchase Agreement, this Agreement may
also be assigned to the Permitted Transferee without the prior written consent
of the Company. Such Permitted Transferee shall, together with all
other such transferees as consented to by the Company, also have the rights of
the Investor under this Agreement, but only if such transferee signs and
delivers to the Company a written acknowledgment (in form and substance
satisfactory to the Company) that it has joined with the Investor as a party to
this Agreement and has assumed the rights and obligations of the Investor
hereunder with respect to the rights transferred to it by the
Investor. Such permitted transfer shall be effective when (but only
when) such transferee has signed and delivered the written acknowledgment to the
Company. Upon any such effective transfer, such transferee shall
automatically have the rights so transferred, and the Investor’s obligations
under this Agreement, and the rights not so transferred, shall continue, provided that under
no circumstances shall the Company be required to provide more than one Shelf
Registration. Notwithstanding any other provision of this Agreement,
no Person who acquires securities transferred in violation of this Agreement or
the Purchase Agreement, or who acquires securities that are not or upon
acquisition cease to be Registrable Shares, shall have any rights under this
Agreement with respect to such securities, and such securities shall not have
the benefits afforded hereunder to Registrable Shares.
-9-
Section
9. Miscellaneous.
(a) Future Registration
Rights. The Company agrees that it shall not grant any
registration rights to any third party (i) unless such rights are expressly made
subject to the rights of the Investor in a manner consistent with this Agreement
or (ii) if such registration rights are senior to, or take priority over, the
registration rights granted to the Investor under this Agreement.
(b) Amendment. No
amendment of any provision of this Agreement will be effective unless made in
writing and signed by a duly authorized officer or representative of each
party.
(c) Waiver of
Conditions. The conditions to each party’s duty to perform its
obligations under this Agreement are for the sole benefit of such party and may
be waived by such party in whole or in part to the extent permitted by
applicable laws. No waiver will be effective unless it is in a
writing signed by a duly authorized officer or representative of the waiving
party that makes express reference to the provision or provisions subject to
such waiver.
(d) Counterparts and
Facsimile. For the convenience of the parties hereto, this
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
will together constitute the same agreement. Executed signature pages
to this Agreement may be delivered by facsimile and such facsimiles will be
deemed as sufficient as if actual signature pages had been
delivered.
(e) Governing Law; Submission to
Jurisdiction, Etc.
|
(i)
|
This
Agreement will be governed by and construed in accordance with the laws of
the State of New York, without giving effect to the conflict of laws
principles thereof.
|
|
(ii)
|
Each
of the parties hereto agrees all disputes arising among the parties
in connection with this Agreement, or the breach, termination,
interpretation or validity thereof, shall be finally settled by the Hong
Kong International Arbitration Centre (the “HKIAC”)
pursuant to UNCITRAL Rules with the Company, on the one hand, being
entitled to designate one arbitrator, and with the Investor, on the other
hand, being entitled to designate one arbitrator, while the third
arbitrator will be selected by agreement between the two designated
arbitrators or, failing such agreement, within 10 calendar days of initial
consultation between the two arbitrators, by the HKIAC pursuant to its
arbitration rules. If any party fails to designate its
arbitrator within 20 calendar days after the designation of the first of
the three arbitrators, the HKIAC shall have the authority to designate any
person whose interests are neutral to the parties as the second of the
three arbitrators. The arbitration shall be conducted in
English. To the extent consistent with UNCITRAL rules, each of
the parties hereto shall cooperate with the others in provision of
information during any discovery process relating to arbitrations in
connection with the Transaction Documents. The parties hereto
further agree that, to the extent consistent with UNCITRAL rules, the
parties shall be entitled to seek temporary and permanent injunctive
relief from the arbitrators without the necessity of proving actual
damages and without posting a bond or other
security.
|
-10-
|
(iii)
|
Each
of the parties hereto agrees that notice may be served upon such party at
the address and in the manner set forth for such party in Section
9(f).
|
|
(iv)
|
To
the extent permitted by applicable laws, each of the parties hereto hereby
unconditionally waives trial by jury in any legal action or proceeding
relating to this Agreement or the transactions contemplated
hereby.
|
(f) Notices. Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile, upon
confirmation of receipt, or (b) on the second Business Day following the
date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered as set forth below,
or pursuant to such other instructions as may be designated in writing by the
party to receive such notice.
|
(A)
|
If
to the Investor:
|
|
Nokia
Growth Partners II, L.P.
|
|
c/o
N.G. Partners II, L.L.C., its general partner
|
|
000
Xxxxxxxxxxx Xxxx, Xxxxx 000
|
|
Xxxxx
Xxxx, XX 00000
|
|
Xxxxxx
Xxxxxx of America
|
|
Attention: Xxxx
Xxxxxxx
|
|
Facsimile:
(x0-000) 000-0000
|
with a
copy to:
|
Xxxxxxxxx
Xxxxxxx Xxxxxx
|
|
Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP
|
|
0000
Xxxxxxx Xxxxxxxxx
|
|
Xxxxxxx
Xxxx, XX 00000
|
|
Xxxxxx
Xxxxxx of America
|
|
Attention:
Xxxxx X. Xxxxxxxxx
|
|
Facsimile:
(x0-000) 000-0000
|
|
(B)
|
If
to the Company:
|
|
KongZhong
Corporation
|
|
35th
Floor, Tengda Xxxxx
|
|
Xx.
000 Xxxxxxxxxxx Xxxxxx
|
|
Xxxxxxx
000000
|
|
People’s
Republic of China
|
|
Attention:
Chief Financial Officer
|
|
Facsimile:
(x00-00) 0000-0000
|
-11-
with a
copy to:
|
Xxxxxxxx
& Xxxxxxxx XXX
|
|
Xxxxx
000, Xxxxx 0, Xxxxx World Trade Center
|
|
One
Xxxx Xxx Men Wai Avenue
|
|
Beijing
100004
|
|
People’s
Republic of China
|
|
Attention:
Xxxxxx Xxx
|
|
Facsimile:
(x00-00) 0000-0000
|
(g) Entire
Agreement. This Agreement constitutes the entire agreement,
and supersedes all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof.
(h) Severability. If
any provision of this Agreement, or the application hereof to any person or
circumstance, is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
(i) No Third-Party
Beneficiaries. Nothing contained in this Agreement, expressed or implied,
is intended to confer upon any person or entity other than the Company and the
Investor (and the Permitted Transferee or other transferee to which a transfer
is made in accordance with this Agreement), any benefits, rights, or remedies
(except as specified in Section 6 hereof).
* * *
-12-
In Witness
Whereof, this Agreement has been duly executed and delivered by the duly
authorized officers of the parties hereto as of the date first herein above
written.
|
KONGZHONG
CORPORATION
|
|||
|
|
By:
|
/s/ XXXXXX XXXXxxxxx | |
| Name: Xxxxxx Xxxx | |||
| Title: CEO of the Company | |||
|
NOKIA
GROWTH PARTNERS II, L.P.
|
|||
| By: | N.G. Partners II, L.L.C. | ||
|
|
|
/s/ XXXX XXXXXXX | |
| Name: Xxxx Xxxxxxx | |||
| Title: Managing Member | |||
